S.F. City College fundraising under probe

UPDATE: City College Officials allegedly spent public money for bond campaign

Stephanie Rice and Lance Williams

Published 4:00 am, Thursday, September 25, 2008

Photo: Monica Davey, Special To The Chronicle

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City College of San Francisco Assistant Vice Chancellor James Blomquist.

City College of San Francisco Assistant Vice Chancellor James Blomquist.

Photo: Monica Davey, Special To The Chronicle

S.F. City College fundraising under probe

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A criminal grand jury is investigating officials at City College of San Francisco for allegedly diverting public funds into a 2005 campaign to pass a $246.3 million bond measure, college documents show.

In a memo dated Aug. 28, college trustees were informed that the lawyer who conducted an internal investigation of political fundraising abuses in the bond campaign was subpoenaed recently to testify before a San Francisco grand jury.

The lawyer, Steven Churchwell, also has been interviewed by investigators from the San Francisco district attorney's office, according to college general counsel Ronald Lee's memo.

As part of its investigation, the district attorney's office has asked the college to provide "tens of thousands of documents," Lee wrote.

Lee's memo was the first indication that the grand jury is looking into a series of problematic political donations first revealed in a Chronicle story last year.

The grand jury's inquiry focuses on donations made in the ramp-up to the November 2005 city election, in which voters agreed to underwrite bonds to pay for the expansion of the 110,000-student community college.

In one incident first reported by The Chronicle, Associate Vice Chancellor James Blomquist told the owner of a motorcycle school who rents a campus parking lot to make his $10,000 rental payment to the bond campaign's political committee, the Committee to Support Our City College, rather than to the college.

In another incident first reported in The Chronicle, owners of a campus coffee shop were told to make their $20,000 lease payment to the political committee rather than to the college.

After the newspaper stories, the college hired Churchwell, an expert in campaign finance law, to investigate. In a report made public in January, he said that college officials had violated state laws against misusing public funds and concealing the true source of political donations.

Churchwell's report faulted Blomquist and two other officials, administrative services officer Stephen Herman and Vice Chancellor Peter Goldstein, for steering public funds to the political committee. But he also said a "glaring lack of oversight" and a lack of training in government ethics laws contributed to the abuses.

At the time, then-Chancellor Philip Day was deeply involved in political fundraising for the bond measures, Churchwell's report noted. Day left City College in March to head the National Association of Student Financial Aid Administrators. He was succeeded by acting Chancellor Don Q. Griffin.

Under state law, officials found guilty of misappropriating public funds can be sentenced to prison, while people convicted of concealing the true source of political donations face fines. The officials implicated in Churchwell's report have said they had not intended to do anything wrong.

Lee informed the trustees of Churchwell's appearance before the grand jury to explain why the lawyer has billed the college an additional $134,000 for legal services. Churchwell already has been paid $75,000 to conduct his internal investigation and write his report. But Lee said the lawyer was required to do significantly more work than anticipated, some of it to prepare for his grand jury testimony. Trustees are expected to vote on the issue at a meeting today.

Trustee Julio Ramos said he was unhappy with the additional billing but thinks Churchwell is entitled to the money.

"He wouldn't have been involved in this if it wasn't for us," Ramos said. "At this point, there's really nothing we can do about it."

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